NEW YORK (GenomeWeb) – After a years-long tease, molecular diagnostic technologies are starting to enter the point-of-care space, prompting expectations that it could drastically change how testing is done in a broad range of clinical settings.
In less than two years, three firms have launched or unveiled molecular platforms targeting the point-of-care market in a first wave of such instruments to hit the space. In January 2014, Alere launched its Alere i system in parts of Europe, followed by the launch of its Alere q platform in July 2014.
Roche then launched its Cobas Liat system in December 2014, and three months ago, Cepheid unveiled the GeneXpert Omni, a lighter, smaller, and less expensive version of its GeneXpert platform. Together, the platforms represent the next step in POC testing technology that have some saying that MDx technology could displace immunoassays in the point-of-care testing space within a few years.
"It's the first inning of the point-of-care molecular space," Canaccord Genuity analyst Mark Massaro told GenomeWeb recently.
Companies and academic researchers alike have been developing MDx technologies for the POC setting for a number of years. That it has taken until now to reach the commercial stage is both a function of market conditions and technological hurdles.
Cepheid Chairman and CEO John Bishop said that while the company has spent several years developing the Omni, Cepheid's main focus has been on growing the firm. The firm entered the clinical space in 2006 and when it did, it focused on the hospital market, which was the most lucrative and had the most urgent need for MDx technology.
"So it's a matter of priorities, appropriate timing vs. market opportunities," Bishop told GenomeWeb.
Vijay Kumar, an analyst at Evercore/ISI compared the MDx space to the computer sector. At first, companies such as IBM focused on building mainframe computers because the money was in large firms and institutions because they were the only ones who needed and could afford that kind of computing power. But as the technology evolved, the industry could build smaller machines that were easier to use, and cheaper, and a new customer base composed of everyday consumers was created.
Similarly, with MDx platforms, "you get to a point where simple people can be operating these instruments in the field," Kumar said. Indeed, a hallmark of technologies such as the Omni is that little to no training is required to use them. Cepheid, Roche, and Alere each boast that a non-expert can learn to use their POC MDx platforms in less than an hour, and in some cases just minutes.
In fact, ease of use is a regulatory requirement for a POC MDx. In order for the technology to be used in a physician's office, it needs to get a CLIA waiver, and a stipulation for such designation is that a person with a seventh-grade reading level must be able to understand the product's instructions.
According to healthcare consultant Harry Glorikian, the industry has been talking about a CLIA-waived molecular test "for a long time." However, it wasn't until this past January that a molecular assay received CLIA waiver, the Alere i Influenza A/B assay run on the Alere i POC MDx platform.
Stuart Cassey, director of global infectious disease marketing for Alere, told GenomeWeb, "There are many challenges to developing a platform which delivers outstanding molecular performance and a rapid time to result. However, developing a POC molecular platform that is CLIA-waivable and therefore very simple to use is a major challenge."
Glorikian called that step, along with CLIA waivers for Alere's i Strep A assay during the summer and Roche's Strep A assay for the Liat in May major accomplishments, not only for the companies but for the industry as a whole because it signaled that the Centers for Medicare and Medicaid Services, which oversees the CLIA waiver process, is getting comfortable with the technology.
"They need to learn just as we need to learn on the industry side," Glorikian said.
Ease of use was just one of the technological issues that MDx developers have had to tackle in order to get their instruments suitable for the POC space. One major barrier has been the time it takes to run a PCR reaction. On a typical molecular platform, the heating and cooling steps result in a turnaround time of about 60 minutes to 90 minutes. That is fine for centralized laboratories, but in a setting such as a physician's office or a pharmacy, where patients sit around waiting for the results, the optimal turnaround needs to be under 30 minutes.
According to Canaccord Genuity's Massaro, getting the PCR cycle down to that level was not achieved until Iquum's former CEO Shuqi Chen developed a PCR technology called flow cycling that bought the turnaround time to 15 minutes, which Massaro said was a pivotal milestone in moving molecular testing to the POC setting. Roche acquired the flow cycling technology in its April 2014 buy of Iquum.
"It was really his company, his technology, in my mind, that … enabled PCR to go from a 60- to 90-minute turnaround to a 15-minute turnaround," Massaro said.
PCR instruments have traditionally consisted of a large heating block with one or more reaction tubes, and they cycle their temperature to achieve the target denaturing, annealing, and extension temperatures, which require anywhere from 30 minutes to several hours to complete.
The flow cycling method, which has been incorporated in Roche's Liat instrument, works around this by using a flexible reaction vessel and a modular sample processor, which compresses various segments of the reaction vessel to heat and cool them more quickly.
Paul Brown, head of Roche Molecular Diagnostics, told GenomeWeb recently that the Liat system's chemistry, the "unique lab-in-a-tube" technology, in which all the PCR reagents are contained in the tube, and the Liat instrument combine to bring down the turnaround time.
"Those three things together allow you to do everything in a closed system in a way that is very simple for the operator but produces high-quality results with a very good turnaround time," Brown said, adding that all of the assays that Roche has or are developing for the Liat can generate test results in less than 30 minutes.
So far, Roche's test for group A Streptococcus bacterial DNA has been cleared by the US Food and Drug Administration and CLIA-waived for the Liat. Another test for flu A/B is FDA-cleared and received CLIA waiver last month. Roche plans to submit a test for flu A/B + RSV shortly, Brown said. Roche is also developing assays for methicillin-resistant Staphylococcus aureus, Clostridium difficile, and other infectious diseases for the system.
For its part Cepheid submitted its flu/RSV assay in May for CLIA waiver on the GeneXpert system, and hopes the test will be available by the end of the year. The company will follow up with a supplemental submission for CLIA waiver of the test on the Omni.
Cepheid's tests, on average, take about 60 minutes for results when run on the GeneXpert, although the firm has set up a program primarily focused around the GeneXpert chemistry that will cut the turnaround time in half, Bishop said. Its first product for the Omni will be a flu A/B and RSV test with a 60-minute turnaround time. The company also is developing an Xpress version of the test that it plans to launch at the end of 2016 that will have a 30-minute turnaround time, and it has developed a Group A Strep test with a 15-minute turnaround time.
Bishop told GenomeWeb that Cepheid was able to develop the lighter and cheaper Omni because of improvements in electronics, which enabled it to miniaturize its GeneXpert instrument and use lower-cost solid-state electronics.
Unlike Roche and Cepheid's technologies, Alere's POC MDx instruments use isothermal amplification, which Cassey said enables rapid turnaround times by using a constant and low temperature instead of thermal cycling. The technology also does not require a separate DNA purification step, thus saving time, complexity, and cost, Cassey told GenomeWeb in an email.
"The Alere i Influenza A/B assay can identify and distinguish between flu A and flu B in less than 15 minutes, while the Alere i Strep A assay can provide results in about eight minutes or less "with an early call-out of positive results," Cassey noted. The Alere q HIV 1/2 Detect assay, meantime, can identify and distinguish between HIV1 subgroup (M/N), HIV1 subgroup (O), and HIV 2 in less than an hour, he added.
Bishop, however, told GenomeWeb in July that some of its competitors are "playing a marketing game" when it comes to turnaround time, and even as Cepheid continues to improve the turnaround time on its assays, the Omni offers other advantages over Alere and Roche's systems. For example, the Omni weighs a little more than 2 lbs., stands about 9 in., and is expected to cost $2,895. By comparison, Roche's Liat is about 8 pounds and costs about $12,000, the Alere q instrument is about 17 lbs and costs reportedly about $15,000, while the Alere I system weights 7 lbs with a reported price tag of approximately $5,000. Alere declined to comment on the price of its instruments.
Each of the four platforms are designed to operate in environments where there are no electrical sources, so that they can be used out in the field. Cepheid's Omni as well as Alere's i and q platforms run on batteries, while the Roche Liat can be either battery or AC powered.
The new platform launches come amid a forecast for robust growth in molecular diagnostics in general with estimates that the market will expand at a compounded annual growth rate of about 10 percent. By 2018, the MDx space is expected to reach about $8 billion.
Meanwhile, Cepheid estimates that in just five years POC MDx testing will comprise about 35 percent of all molecular testing, up from less than 1 percent today, although it also anticipates that MDx testing in the POC setting will cannibalize molecular testing in reference labs and hospitals.
In the point-of-care setting, the promise of platforms such as the Omni is that they will bring molecular technologies directly to settings where access to the technologies has been limited, or even impossible. They include physician offices, pharmacies, urgent care centers, and emergency rooms. In the process, clinicians will be able to diagnose diseases more accurately and quickly.
While POC testing has been around for decades, it has been done primarily with immunoassays, which while quick can be notoriously inaccurate, resulting in wrong or unclear diagnoses, and in the most extreme cases, death.
But even if there is no patient harm, immunoassay technology can be inconvenient and add costs to the healthcare system. Roche's Brown recounted his own recent experience with his daughter who had to undergo a strep test. Her doctor used an immunoassay, and when the result came back negative, she had to take another test, based on culture, to confirm the initial result.
Typically, immunoassay strep tests have a sensitivity and specificity of about 50 percent, Brown said, while PCR-based tests have sensitivity and specificity in the high-90s. As a result, there is no need for reflex testing on a PCR test. "The results are so good that if you get a negative [result] you can rely on the negative predictive value of the assay," he said.
Another area that may benefit from POC MDx technology is in curbing the overuse of antibiotics, which has become a major health problem. "We need to have diagnostically directed use of antibiotics," Bishop said. The use of "inferior technology" that provides inaccurate results, such as immunoassays, has limited effect, however, and the accuracy enabled by POC MDx tests would eliminate any guesswork, he added.
Another significant opportunity for the technology is in emerging nations, or what Cepheid calls high-burden developing countries, where scarce resources make it sometimes impossible to use traditional MDx platforms. In countries with high rates of HIV infections but with limited resources, "[c]ertainly, there is potential to use Liat in a point-of-care setting" and Roche is developing an HIV test for that platform, Brown said.
Through its HBDC program, Cepheid has placed more than 4,000 GeneXpert platforms, and the Omni may enable it to further extend the reach of its technology to markets currently unreachable with the GeneXpert.
For those markets, assays launched with the Omni will include those for quantitative HIV viral load, qualitative HIV, tuberculosis, hepatitis C, and Ebola, Bishop said.
The Omni won't be available in the emerging markets until the first half of 2016, but the response to the platform in those markets have been "very, very positive," according to Bishop. Pointing to the example of HIV and HCV, he said that while there are drugs for treatment and management, "the problem is that it's impossible to get to all those patients with a centralized testing model, so people in the market, particularly the NGOs [see] an ability now to get accurate broadly disseminated [technology] to reach patient populations where they haven't been able to reach them before."
Will they buy it even if you build it?
But in spite of its promise, there are barriers to the adoption of POC MDx technology. For one thing, the technology is not cheap. Cepheid's Omni has the lowest price tag, $2,895, a fraction of the approximately $27,000 list price for Cepheid's GeneXpert system, but still a not-unsubstantial investment for a physician's office, especially if multiple instruments will be needed, such as for a busy flu season.
Industry officials, though, said that the value proposition of the technology can't be measured solely by its price. Bishop told GenomeWeb that the investment by physicians into the technology is "significant, but it's not so high as you look at their relative investments that … it's something they can't afford out of pocket for the facility. The item is going to improve overall patient workflows [and] patient management for the clinicians."
Brown added, "It's not just a simple price argument. If you've got an assay that has that sort of turnaround time, that is easy to use — it can be used by an untrained nurse, practitioner — and you've got very high-quality results in terms of sensitivity [and] specificity, the value proposition there is very high."
To make the technology accessible, Roche, Alere, and Cepheid will make their platforms available on a reagent rental model, as well as through outright purchases. Under a reagent rental model, customers may have to pay a little more for the assays, but that will be more than offset by reimbursements for molecular diagnostic tests that tend to be higher than those for immunoassays.
Indeed, the higher reimbursements for molecular tests should be an incentive for physicians to adopt POC MDx tests, experts said. "The two huge reasons physicians should use molecular [assays] are better accuracy [and] better results," Massaro of Canaccord Genuity said, adding "they have an economic incentive to do so because the reimbursements justify using it." He estimated that on average, molecular tests are reimbursed at levels three times that of immunoassays.
Glorikian said that if healthcare providers are going to be reimbursed based on health outcomes — as some have advocated — the incentive to use POC MDx technologies become even greater. Physicians will start to say, "'You know what, we're going to do this, wait 15 minutes. I want to make sure we've got the right answer, so I know exactly how to treat you,'" he said.
Still, as with any technology, there is the risk that the market will not be receptive, even if the technology works as well as advertised. For the moment, the flu may be the biggest disease area being targeted for POC MDx tests, but Massaro noted that not everyone agrees that a molecular flu test is necessary. The flu testing market in Europe is significantly smaller than in the US, as is the market for prescription medicines to treat it, for example.
There, flu testing is not very prevalent and to treat it, Europeans "only drink some tea and [go to] sleep. … Europeans probably think we're crazy to have a flu testing market as big as we have," Massaro said.
In the US, he added, there will be physicians, particularly older ones, who won't see the value of molecular testing. "You're going to have a segment of physicians who say [immunoassays] work great," and are cheaper.
And for some disease indications, molecular diagnostics don't appear to offer any advantage over immunoassays. Cepheid's Bishop pointed to heart disease, for which tests that measure troponin levels work fine.
But, he and others added that for a host of ailments, molecular diagnostics, especially in a point-of-care setting, can be clinical game changers. Even in the case of flu, while it may not be especially life-threatening for most people and can be managed with a few days of bed rest, it can be deadly for the elderly, infants, and those with underlying health conditions. And for those populations, an accurate, rapid test can be valuable.
And regardless of what European clinicians may think, Massaro said that in the US, the prevailing opinion among healthcare providers is that molecular flu testing provides real, clinical value. "From what I hear, you have a lot of clinics that really care about an accurate diagnosis. To the extent that practitioners are misdiagnosing people, or not diagnosing people, the worst thing would be missing the flu diagnosis in an elderly person and have that person die," he said.
While Alere, Cepheid, and Roche have taken the lead in commercializing their POC MDx technologies, some predict that many more players will enter the space in the coming years. In a recent research report, Massaro cited Quidel, as well as privately held firms Xagenic, Atlas Genetics, Lucigen, and Epistem as players that are poised to enter the POC MDx space with their own platforms in the next few years.
Massaro also said that M&A in the POC MDx market could heat up with Quidel, Meridian Bioscience, and OraSure Technologies "the most logical buyers given their M&A appetite and balance sheet."
At the same time, academic research focused on the technology remains robust. Recently, researchers from the University of Montreal published a study in the Journal of the American Chemical Society describing a POC MDx technology to diagnose a range of diseases from cancer, allergies, autoimmune diseases, sexually transmitted diseases, and others.
A team of scientists from the University of Arizona has also developed a new device that they say can significantly reduce the amount of time required to diagnose tissue infections. Based on a technology dubbed DOTS qPCR, short for droplet-on thermocouple silhouette real-time PCR, the device can amplify and identify an infection in as few as four thermal cycles, compared to other techniques that require between 18 and 30 cycles, the researchers said. They added that they believe their technology will enable physicians to quickly provide biopsy results immediately while they are still sitting with the patient.
And a University of California, San Francisco-led team of researchers recently said they completed a proof-of-principle study on a real-time test based on DNA sequencing using Oxford Nanopore's MinIon platform. The test, they said, can be used to rapidly diagnose acute infections such as Ebola. They added that it can be used in settings where laboratory space and medical infrastructure are scarce.
Glorikian noted, though, that in spite of all the R&D around POC MDx systems and tests, commercializing them is not a trivial process. "Your regulatory [operation] has to be top notch, your reimbursement group has to be top notch … you've really got to go through your check list to get these products on the market."
That calls for a level of funding that small companies may not have, even if investors are high on POC MDx technologies, he said.
Even for companies firmly established in the MDx arena, moving into the POC market is a puzzle not easily solved.
In early 2010 Qiagen acquired ESE for $19 million in cash, providing Qiagen an entry into the POC MDx space. Since then, however, Qiagen has made the technology available only as an original equipment manufacturer. It has not developed any assays of its own for the ESE technology and has no timeline to do so, although a company official told GenomeWeb that the "plan is, of course, to have our instruments married with the assays of Qiagen."
According to Joerg Schickedanz, head of point-of-need instrumentation for Qiagen Lake Constance, because the firm has traditionally focused on PCR-based technology, "there have been … some applicational restrictions" with the ESE instrument because it is based on isothermal amplification.
He added: "Also I think it's a complete different business to sell these instruments with assays to the central labs [and] to sell small instruments with only a few assays to a doctor. It's a different sales channel and this sales channel has to be developed."
Indeed, when Cepheid launches the Omni in the US POC market, where the firm does not have a presence, it will do so using distributors. It has no plans to sell direct in the US, Bishop said.
In the meantime, he said that the conversion of the immunoassay-based POC testing market to a POC MDx market has already begun, particularly in flu and Group A strep.
"You have three companies that are coming into the market simultaneously [and] that will help develop the market," he told GenomeWeb. "Nobody has a strong position one way or the other, and my view is that it's actually going to be helpful … [in] educating the market on the benefits of molecular testing."